The centerpiece of Tyme Bank’s corner of a co-working space in Hong Kong is a kiosk machine. It looks like a sleek ATM, but it doesn’t handle cash. Instead it can onboard a new retail customer within minutes, culminating in its printing out a bespoke Visa credit card embossed with the new customer’s name, ready to go.
Compared to the usual one or two weeks it takes for a traditional branch-based bank to issue or renew a debit or credit card, the machine is pretty spiffy.
The bank has recently boasted it has now signed up 1 million individual customers in South Africa. The kiosk accounted for about 85% of those, with its website managing the rest.
From bank to vendor
Coen Jonker, founder and CEO of Tyme Bank, says he doesn’t intend to launch it in Hong Kong. Rather he is positioning the company as a vendor to virtual banks in Asia, or to traditional banks looking to give their digital offering a boost.
The bank already provides its machines to PTCB, the Indonesian arm of Commonwealth Bank of Australia.
Putting kiosks in stores is cheaper than digital-onlyCoen Jonker, Tyme
Jonker was for a time CBA’s digital head in Hong Kong, and CBA had a stake in Tyme. He left the bank and bought out the business in 2018, and the bank went live in Jonker’s native South Africa in February 2019.
In a discussion about what makes fintech tick, he spoke about the kiosk’s “very functional design”. Maybe it was a process of iteration that led to the Tyme machine, but Jonker’s outside passions might have helped.
Sculpting a strategy
He’s a sculptor, particularly with clay. For a while, it was his profession, but he gave it up to focus on his banking career. Our conversation veers into materials, and artists such as Henry Moore. I mention OCBC Bank now has a gigantic Moore on display outside its headquarters in Singapore – and we’re back to discussing finance.
While it would be a disservice to Moore to liken his work to a commercial machine, there is nonetheless a lot of craftsmanship that goes into creating such a thing. What’s really counterintuitive is to think a physical apparatus would be necessary to a branchless, digital bank.
“Putting kiosks in stores is actually cheaper than digital-only,” Jonker said. Online banking requires a big marketing spend, plus the cost of couriering a bank card to new customers.
Lending to SMEs at a reasonable cost is our Holy GrailCoen Jonker, Tyme
Plus, giving users a card right away, one with their name on it, provides immediate gratification. “Humans feel there’s security with an artifact. We love things,” Jonker said.
Putting a human representative alongside the kiosk to gin up new business further added to the machines’ productivity.
Keeping it simple
The kiosks are placed in malls, mom-and-pop stores, and other outlets where people put in or take out cash (which requires integrating software with the merchant’s cash register). Tyme now has a broader footprint on the ground in South Africa than any commercial bank, but without ATMs, which makes its machines safe to place in visible locations that would otherwise be targets for a heist.
(In Indonesia, though, PTCB supports only about 250 of the kiosks; Jonker says there’s a lot of growth potential, as Indonesia has a much bigger population than South Africa – but it’s not Tyme’s decision. PTCB focuses more on wealth management, and is using Tyme’s kiosks to broaden its exposure to consumer banking.)
Tyme provides very basic services: deposits, payments transactions, and unsecured consumer loans. Its goal is to get into lending to small businesses, which requires a greater pickup of electronic banking and payments, as opposed to cash, which dominates emerging markets.
Anything else requires a partner: for example, in South Africa, Tyme works with RCS, a subsidiary of BNP Paribas, to support its credit cards. RCS provides balance sheet and a credit-scoring model, while Tyme is just its front-end distributor.
The bank’s funding model is also simple, at least for now, relying on deposits to fund its loans. Jonker said the bank might consider wholesale funding and securitization for other products.
Jonker’s focus, however, is on paving the way for digital services. “The big revolution is getting people to go from cash to electronic transactions,” he said. Getting there will allow banks like Tyme to make more micro-loans and loans to SMEs as competitive rates, fueling more trade and business in developing countries.
“Lending to SMEs at a reasonable cost is our Holy Grail,” he said.